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Lee Kyung-min

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Economy

Gov't hints at intervening in forex market

Deputy Prime Minister and Finance Minister Hong Nam-ki, right, speaks during a National Assembly audit of his ministry on Yeouido, Seoul. YonhapBy Lee Kyung-min The country’s finance minister has hinted at intervening in the local foreign currency market as a pre-emptive measure to limit swings in the value of the won hit by supply and demand mismatch amid continued market volatility. This possibility is a response to the local currency's rapid strengthening against the dollar over the past month, a cause for major concern to many growth driver firms -― notably manufacturers ― in export-reliant Korea. Sustained appreciation of the won against the dollar will sap the competitive edge of Korean export firms, ending up tightening domestic consumption – a dreadful combination that will frustrate the prospect of the much-awaited economic recovery. Also fanned by the currency losing value is the fear of deflation ― an overall decline in the general prices of goods and services ― a lingering concern dreaded by economists and policymakers despite a recent recovery in co

Oct 22, 2020By Lee Kyung-min
Gov't hints at intervening in forex market
Economy

A simple math problem too difficult for FSC?

Financial Services Commission Chairman Eun Sung-soo Korea Times fileBy Lee Kyung-minThe Financial Services Commission (FSC) had abruptly removed a clause in a revision governing businesses having to select an accounting firm, in a desperate, last-minute attempt at saving face following what essentially was a simple failure to “do the math,” according to sources, Tuesday. The country's top financial authority's careless mistake was brought to the public's attention only because the Ministry of Government Legislation identified the error during a review.According to the revision, the FSC reduced the number of members in a committee needed to hire an accounting firm to five, down from seven. Such a committee must be set up by listed firms, large non-listed firms and financial firms in accordance with relevant laws to comply with corporate audit procedures.The reduction reflected criticism from many firms to whom forming a committee is increasingly becoming difficult due to the low participation of shareholders in general, not to mention strict requirements to qualify as a me

Oct 21, 2020By Lee Kyung-min
A simple math problem too difficult for FSC?
Economy

Gov't relief should prioritize manufacturing, IT jobs: KDI

Lee Jong-kwan, an associate fellow of the Knowledge Economy Department at the Korea Development Institute (KDI), during a press briefing at the Sejong Government Complex Courtesy of KDIEmployment multiplier-increasing industries crucial to economic recoveryBy Lee Kyung-min The government's emergency relief should focus on retaining jobs in the manufacturing and other industries in the “tradable sector,” in a long-term move to limit the loss of quality jobs which will lead to a significant subsequent downturn in the service and retail industries, a state-run think tank said Wednesday.The sector, according to economists, encompasses manufacturing as well as knowledge-based industries utilizing information and science technology, whereas the “non-tradable sector” includes eateries, lodgings, travel, retail and wholesale, healthcare and education.A loss of a substantial number of jobs in the tradable sector will be hard to recover, not only triggering a longer-than-feared economic slowdown but also undermining the country's economic resilience and vibrancy in the

Oct 21, 2020By Lee Kyung-min
Gov't relief should prioritize manufacturing, IT jobs: KDI
Economy

Gov't needs to compile data on foreign home buyers

Apartment complexes in Seoul / YonhapBy Lee Kyung-min The government is being urged to set up a system to compile data on properties owned and traded by foreign nationals to better identify taxable income and prohibit speculation amid their suspected growing presence in the property market, a ruling party lawmaker said Tuesday.A comprehensive set of data is needed to establish the legal groundwork to ensure foreign property owners pay tax for windfall gains made through a variety of tax incentives and lending rules that were initially created to induce foreign investment to bolster Korea's economy.Rep. Kim Hoi-jae of the ruling Democratic Party of Korea (DPK) said the land ministry with the cooperation of the Korea Appraisal Board (KAB) should promptly initiate necessary processes to set up the system.“The only way for the government to identify the number and value of houses bought by foreigners is to make inferences from tax returns preserved by the National Tax Service,” he said during a meeting of the Land Infrastructure & Transport Committee at the National Assem

Oct 20, 2020By Lee Kyung-min
Gov't needs to compile data on foreign home buyers
  • Korea can be used as haven for foreign landlords
Economy

Questions linger over New Deal Fund

Growth initiative marred as policy fund could strong-arm lenders By Lee Kyung-min The much-hyped New Deal Fund may not be as effective a growth plan as the government expects, unless preceded by a drastic measure to guarantee profit margins acceptable to businesses that have no need to borrow money at a higher rate from the fund pooled by the public, experts said Thursday. The profit-oriented infrastructure builders and renewable energy producers will have no incentive to find a new source of funding, since the sector has established way of financing and deal-sourcing with minimal government intervention for over two decades. Even if a few big name lenders cough up money to set up the fund just to “toe the government line,” the collective, forced move will be criticized as nothing less than “extortion,” altogether undermining the government initiative supposedly set up to bolster sustainable growth.The government said it will invest in 197 digital and green projects in 40 sectors via the Korean New Deal Fund, a government policy fund of 20 trillion won ($17 bi

Oct 19, 2020By Lee Kyung-min
Questions linger over New Deal Fund
Economy

Finance ministry's portal 'useless'

Rep. Yoo Gyeong-joon of the main opposition People Power Party speaks during a Strategy and Finance Committee session at the National Assembly in Yeouido, Seoul, Oct. 14. YonhapBy Lee Kyung-min Open Fiscal Data, an online tax revenue and expenditure data portal set up and operated by the Ministry of Economy and Finance, remains underutilized by the public despite a hefty investment of 600 million won ($525,000) spent to update the system in 2018, an opposition party lawmaker said Monday. Criticism is growing, given the tax money spent has apparently failed to fix its user interface which is counterintuitive and user-unfriendly. The failure points to an administrative inefficiency highlighted further by a lack of features that makes simple time series analysis virtually impossible, he added.Data presented by Rep. Yoo Gyeong-joon of People Power Party (PPP) at the National Assembly Strategy and Finance Committee session showed the ministry-run portal was used just 77,000 times in 2020. This is about 0.8 percent of the 8.73 million times visitors accessed a data portal for jobs, co

Oct 19, 2020By Lee Kyung-min
Finance ministry's portal 'useless'
Economy

Korea needs to embrace inclusive policies for multiracial families

Multiracial children pose for a photo / gettyimagesbank1 in 14 will have non-Korean background by 2040 By Lee Kyung-min Korea needs to become more accepting of those with foreign backgrounds, a task that requires continued nationwide advertising and education campaigns to end discrimination, experts said Sunday.Social cohesion will be best achieved through consistency in education and awareness-raising programs, backed by sensitivity training of not only children but also their parents and educators early on to fundamentally change their bias-oriented remarks and behavior, they added.The recommendation followed a recent report from Statistics Korea that showed that by 2040 one in 14 Korean residents will be classifiable as foreigners or naturalized Koreans and the children of these categories. This forecast is accelerated by the rapidly aging population brought on by a record-breaking low birthrate over the past few years.“It is a work in progress,” Migration Research and Training Centre head Kang Dong-kwan said.A growing number of people has become more open to the conce

Oct 18, 2020By Lee Kyung-min
Korea needs to embrace inclusive policies for multiracial families
Economy

'1 in 5 foreign shareholders could be linked to tax dodging'

W37.9 tril. held by 2,095 from Luxembourg By Lee Kyung-min Over 20 percent of foreign shareholders were registered in “tax haven” countries often used for overseas tax evasion and other illegalities, a ruling party lawmaker said Wednesday.Foreign investors from a number of countries that impose little to no tax liabilities, with no residency or business presence here, are increasingly linked to speculative forces in the local financial market, according to the lawmaker, which he considers to be a source of major disruption that must be dealt with.Data presented by Rep. Park Kwang-on of the ruling Democratic Party of Korea (DPK) showed 9,269 foreign investors here were registered in 50 countries believed to be monitored by the OECD as tax havens. They were among 44,318 registered in 126 countries.The National Tax Service has been refusing to publicly acknowledge that there is an official list of countries being monitored since 2015, citing potential diplomatic friction.About a third, or 31 percent, were registered in the Cayman Islands (2,898), followed by Luxembourg (2,0

Oct 14, 2020By Lee Kyung-min
'1 in 5 foreign shareholders could be linked to tax dodging'
Economy

Korea to finalize specifics of digital tax next year

Ko Kwang-hyo, right, the director general in charge of the income tax and corporate tax bureau under the Ministry of Economy and Finance speaks during a briefing at the Sejong Government Complex, Monday. Courtesy of Ministry of Economy and FinanceBy Lee Kyung-min “Digital tax” for Samsung, Hyundai and LG will be limited overseas, following an agreement from the OECD, which will recognize permanent establishments set up and operated by the leading Korean manufacturers as grounds to partly ease related tax rules, the finance ministry said Monday.The agreement being fine-tuned by the international body is part of the worldwide move to impose a digital tax on global tech giants and cross-border multinational firms in countries where their services are provided.Financial service providers, air carriers, marine transport operators, infrastructure builders and semiconductors will be classified as producers of intermediate goods and services and therefore exempt. The tentative tax to be imposed in stages ― often referred to as the “Google tax” ― is being introduc

Oct 13, 2020By Lee Kyung-min
Korea to finalize specifics of digital tax next year
Economy

Controversy continues over ministry's 'anti-capitalism' policies

Deputy Prime Minister and Finance Minister Hong Nam-ki speaks during the parliamentary audit of the ministry at the National Assembly in Yeouido, Seoul, Thursday. YonhapBy Lee Kyung-min The government policies of imposing a heavier tax on corporate income and financial investment continues to draw backlash from businesses and experts who claim excessive government intervention will dampen business sentiment, with the country's growth opportunity lost in the process.Corporate and investment activities should not and cannot be dictated by politically charged measures to disincentivize profit-seeking, a right that should be guaranteed in a free market economy, they say. Drastic reassessment of policy priorities is needed to reduce and remove unnecessary spending amid expansionary fiscal policy ― defined by ineffective and repetitive welfare programs ― prolonged and strengthened by the COVID-19 pandemic. Otherwise, the government efforts to identify new sources of revenue will backfire, derailing the administration's key policy directives. Deputy Prime Minister and Finance Minister Hong

Oct 9, 2020By Lee Kyung-min
Controversy continues over ministry's 'anti-capitalism' policies
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